Private residence (PPR)

Private residence (PPR)

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My client owns and occupies a flat as his residence within a building comprising of four flats. He also owns the freehold of the entire building. The flat was acquired in 1994 and the freehold interest in 1996.

Whilst he will continue to own the leasehold interest as his residence, he proposes to sell the freehold interest to a limited company of which all the flat owners are shareholders. The gain is substantial and I was wondering if the capital gain attributable to the "freehold value" of his flat is eligible for PPR exemption for CGT purposes.

Any views would be most welcome.

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By Ernest N Dever
26th May 2011 13:58

No

For PPR to apply you need to dispose of an interest in a dwelling house or part of a dwelling house used as the individual's main residence.

The building itself isn't a dwelling house.  The individual flat units are the dwelling houses.

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